What are target price and stop-loss?
- June 6, 2017
- Posted by: PurpleTrades
- Category: Stock Market
Target price is the desired price at which a trader wishes to book his holdings.
Ex: If you buy a stock at 100 and wish to book profit at 105,
just put target as 105, once stock goes up to 105, your order will be executed and your profit will be booked.
Stop loss: It is denoted by SL, and is a tool to avoid further losses and to minimise your losses.
Ex: If you wish to just risk 500 rs and you have 100 shares of x stock priced at 100.
you can place 95 as your stop loss, If market goes down and stock reaches 95, your SL will get executed and you will book desired loss i.e 500 rs any further decline of market wont influence your capital as you have already booked losses.
always target and stop loss should be equal.
i.e if you wish to earn 1000rs you should be ready to risk only 1000 from that trade.
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